Fiscal policy involves
A) the use of interest rates to influence the level of GDP.
B) the use of tax and spending policies by the government.
C) decreasing the role of the Federal Reserve in the everyday life of the economy.
D) the use of tax and money policies by government to influence the level of interest rates.

Question

Quizplus · Accepted Answer

Fiscal policy refers to the use of government's tax and spending policies to influence the level of economic activity and stabilize the economy. It is different from monetary policy, which involves the use of interest rates and money supply to achieve similar goals.

Fiscal Policy Involves